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Chrysler Bankruptcy Almost Assured
We'll know for sure by April 30, but it's hard to read Chris Isidore's CNNMoney article "Time Running Out on Chrysler" and not feel certain that Chrysler is circling the drain.
In an LA Times blog by Ken Bensinger, AutoNation CEO Mike Jackson expresses real doubt about Chrysler's ability to survive, saying, "I think it's likely a deal gets done, but it's possible that, due to the complexity of the negotiations, it can't get done and you have to wind down that concern."
Wind down that concern. A top-notch euphemism for putting it out of its misery if I ever heard one. And I couldn't agree more: it's Chrysler's time to go. For far too many years than not, they've enjoyed 'Big 3' status by default.
When Time magazine named Walter Chrysler its Man Of The Year in 1929, they hailed him as "The greatest doctor of sick automobile companies that the industry had ever known."
It's not ironic—at most it's coincidental—that the car company he founded out of Maxwell Motors is today the sickest of the lot.
As a young man Chrysler dropped $5000 on a 1905 Locomobile. But instead of driving it, he took it apart and pieced it back together a couple times. His experience as a railroad engineer led him to cars when in 1911 he began to cure his first car company, GM's Buick company. As head of production at General Motors, no one mattered more to the success of that company at the time. He then turned the Willys-Overland Motor company into a money maker before acquiring Maxwell Motors and turning it into Chrysler Corporation.
By the time he was acknowledged by Time for his achievements, Chrysler had built the impressive Chrysler Building in New York and was challenging GM for industry supremacy.
Then came the Airflow and the Great Depression, which would have pipebombed the company were it not for the success of the Plymouth brand. In the 1950s the development of the Hemi V8 helped spare them when a national recession hit at the end of the decade.
They scrimped by for the next 20 years thanks in part to the success of the muscle car, but bad ideas, bad decisions and bad leadership, coupled with the 1970s energy crises, had Chrysler on its death bed by 1978. As Lee Iacocca says in the 1984 ad below, they had one foot in the grave. They were spared by two bailouts: a Jimmy Carter bailout in the form of a government loan, and a Ford bailout in the form of firing Lee Iacocca.
In one of their rare smart decisions regarding leadership, they madly recruited Iacocca, a man whose work at Ford in the 1960s severely debilitated the Chrysler brand. He arrived with an idea Ford had flatly rejected: the minivan. Enter the phenomenally successful Dodge Caravan and Plymouth Voyager to emasculate a generation of young fathers.
Chrysler did well in the 1990s, which led to their acquisition by Daimler-Benz, but after a number of years they would dump the brand to Cerberus Capital Management. Shortly thereafter, enter labor problems, enter crisis, enter bailout.
How many times will Chrysler be allowed to cheat death? Their record as a great American car company is spotty at best, unwarranted at worst.
Economic crises showcase Darwin's survival of the fittest as well as any other platform, so don't feel sorry for Chrysler—this is competition for limited resources, and the company just doesn't have what it takes to make it through to another difficult era.
Expect some of her better brands to stay alive by being sold off, but Chrysler—in name and stature—is about to become extinct.
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